How Rising Interest Rates Change Safe Retirement Withdrawal Plans

For retirees who are using systematic withdrawals from a balanced portfolio, these losses force them to sell more shares to generate the same income, which permanently reduces the portfolio's ability to recover when rates stabilize. The traditional 60/40 portfolio, or 60% stocks and 40% bonds, got hit from both sides as rates rose. Stocks, in turn, declined as higher rates made future earnings less valuable and increased borrowing costs for companies.It's important to start with the understanding that bond ...